Indian economy loses $65 billion annually to inefficient supply chains

According to a recent study, inefficient supply chains are costing the Indian economy billions of dollars every year.

In the report, published by the Confederation of Indian Industry and Amarthi Consulting, India is ranked 47th on logistics. That puts it behind countries including Japan, the U.S., Germany and China. The report, entitled "Global Competitiveness of Retail Supply Chain: Challenges, Strategies and Recommendations," finds that supply chain costs in India, which deal with the procurement, manufacture and distribution of products and services, are about 12 to 13 percent of the gross domestic product. In most developed countries, these costs comprise only 7 or 8 percent of the GPD.

Supply chain efficiency drives the retail sector, and India is no exception. The country's retail market is expected to grow to more than $879 billion by 2018 - but the country loses $65 billion every year due to inefficient supply chain systems, according to the report.

Despite the challenges, the country's leadership feels confident that India can build a supply chain that will fix the ineffeciency and help the country earn its place among the world's top economies.

"We can be flexible, change with the times and as we have no baggage of the past, we can build the best supply chain," Anshuman Singh, managing director and chief executive officer of Future Supply Chain Solutions, told Personal Finance Magazine.

India is one of the most heavily-populated countries in the world, and is home to nearly 1.2 billion people. Even considering its $65 billion waste, its economy is the fifth largest in the world - behind the European Union, the U.S., China and Japan.